Flint v Commonwealth

[1932] HCA 49

47 CLR 274

THE COMMONWEALTH Public Service-Officer-Transfer from State to Commonwealth-Pension-Amount-

Whether liable to reductionAmount of pension fixed by Constitution-The Constitution (63 &64 Vict. c. 12), sec. 84*-Financial Emergency Act (No. 10 MELBOURNE,

of 1931), sec. 22 )*-Financial Emergency Act 1931 (Vict.) (No. 3961), sec. 13.*

Where a Department of the Public Service of a State has been transferred the Commonwealth, sec. 84 of the Constitution gives to an officer of the Department who has been retained in the service of the Commonwealth the right on retirement to a pension of the amount to which, if he had continued in the service of the State, he would have been entitled under the law of the State at the time of his retirement; and the amount cannot thereafter be reduced by Commonwealth or State legislation. DEMURRER.

Arthur Loftus Sylvester Flint brought an action in the High Court against the Commonwealth of Australia claiming £53 17s. 11d. due from the defendant as superannuation allowance and a declaration that he was entitled to payment of a superannuation allowance at the rate of £337 18s. 4d. per annum.

*The Constitution, by sec. 84, pro-

abolition of his office. Any such vides :-" When any Department of

officer who is retained in the service of the Public Service of a State becomes

the Commonwealth shall preserve all transferred to the Commonwealth, all

his existing and accruing rights, and officers of the Department shall become subject to the control of the Executive

the time, and on the pension or retiring Government of the Commonwealth.

allowance, which would be permitted Any such officer who is not retained in

by the law of the State if his service the service of the Commonwealth shall, unless he is appointed to some other

tinuation of his service with the State. office of equal emolument in the Public

Such pension or retiring allowance Service of the State, be entitled to

shall be paid to him by the Common- receive from the State any pension,

wealth; but the State shall pay to the gratuity, or other compensation, pay-

Commonwealth a part thereof, to be able under the law of the State on the

calculated on the proportion which his

47 CLR 275

The statement of claim alleged :-1. On 1st December 1878 the plaintiff was appointed to an office in the Public Service of the State of Victoria and continuously held an office therein until the Department in which he held office was on 1st March 1901 transferred

Commonwealth. said 1st March 1901 continuously held office in the Public Ser- vice of the Commonwealth until his retirement therefrom on 11th January 1924. 3. The plaintiff on his retirement would have been a superannuated officer within the meaning of the Civil Service Act 1862 (No. 160) of the Colony of Victoria if his service with the Commonwealth had been a continuation of his service with the State of Victoria.

4. The average annual salary received by the plaintiff during the three years preceding superannuation was £506 17s. 6d. 5. The retiring allowance which would be permitted by the law of the State of Victoria if the plain- tiff's service with the Commonwealth had been a continuation of his service with the State would be £337 18s. 4d. per annum. 6. The defendant has since 18th July 1931 paid the plaintiff a retiring allowance at the rate of £279 2s. 5d. per annum and has refused and refuses to pay a retiring allowance at the rate of £337 18s. 4d. per annum. The plaintiff claimed £53 17s. lld., the difference between an allowance at the rate of £337 18s. 4d. per annum and one at the rate of £279 2s. 5d. per annum for eleven months, and a declaration that the plaintiff was entitled to be paid by the defendant a retiring allowance of £337 18s. 4d. per annum. term of service with the State bears to his whole term of service, and for the

been computed under Act No. 160 (and purpose of the calculation his salary

whether pursuant to section fifty-seven shall be taken to be that paid to him by

or section fifty-eight of the Super- the State at the time of the transfer."

annuation Act 1928 or otherwise) and The Victorian Financial Emergency

which is paid out of the consolidated Act 1931, which came into opera-

revenue or the Superannuation Fund tion on 1st October 1931, provided

shall be and is hereby reduced as pro- by sec. 13 Notwithstanding any-

vided in the Second Schedule: Pro- thing in any Act or any law to

vided that no part of any such pension the contrary, on from and after the

superannuation or retiring allowance tenth day of July one thousand nine

with respect to which contributions hundred and thirty-one and until the

under the Superannuation Acts have seventh day of July one thousand nine

been made shall be reduced Provided hundred and thirty-two, the rate of

further that the pension superannuation pension or superannuation or retiring

or retiring allowance to which any such allowance to which any person or his

person or his representatives is or are representatives is or are or becomes or

or becomes or become entitled and

47 CLR 276

The defendant admitted pars. 1 to 4 and par. 6 of the statement of claim and alleged 5. It admits that the retiring allowance which would be permitted by the law of the State of Victoria if the plaintiff's service with the Commonwealth had been a continuation of his service with the State would, up to 10th July 1931, be £337 18s. 4d. per annum: Save as aforesaid it denies each and every allegation contained in par. 5 of the statement of claim. 7. By reason of the provisions of sec. 13 of the Financial Emergency Act 1931 of the State of Victoria and/or of sec. 22 of the Financial Emergency Act 1931 of the Commonwealth of Australia the plaintiff has since the said 10th July 1931 not been entitled to a retiring allowance at a higher rate than £279 2s. 5d. per annum. 8. The defendant has paid in full to the plaintiff any retiring allowance to which he is entitled in law."

The plaintiff demurred to the whole of the defence on the ground that the facts alleged did not show any ground of defence, and objected in law that on the proper construction of sec. 84 of the Constitution the plaintiff was entitled to such retiring allowance as would have been permitted by the law of the State of Victoria at the date of his retirement if his service with the Commonwealth had been a continuation of his service with the State of Victoria.

The demurrer was referred to the Full Court of the High Court for argument.

C. Gavan Duffy, for the plaintiff. The plaintiff's rights were settled, once and for all, either when he was transferred to the which is comprised in any group speci-

Constitution to any person who, having for the purposes of this Part be reduced

Commonwealth, is entitled to retire, or be receivable by him or them if the

has retired, from office on the pension same were comprised in the group next

or retiring allowance permitted by the lower in amount and such person or his

law of the State as if his service with representatives were entitled to the maximum pension superannuation or

tion of his service with the State, shall retiring allowance specified in the

be reduced by such percentages or Second Schedule in respect of that

amounts as are provided, from time to lower group but less the reduction

time, by or under any law of the State applicable thereto."

from the Public Service of which he The Federal Financial Emergency Act

was transferred to the Public Service of 1931, which came into force on 20th

the Commonwealth, which would have July 1931, provides by sec. 22 (2) :-

been applicable to him if his service

' All payments of pensions or retiring

with the Commonwealth had been a allowances payable by the Common-

continuation of his service with the wealth under section eighty-four of the

47 CLR 277

Commonwealth service or else when he retired from the Common- wealth service. Sec. 84 of the Constitution gives a definite and unalterable right to a pension, and any attempt to alter such right either by the Commonwealth or by a State is nugatory. The plaintiff had been receiving pension at the proper rate for some years prior to the enactment of the Federal and State Financial Emergency Acts. Sec. 84 of the Constitution means that all the rights of public ser- vants were settled and measured once and for all when the officer came over from the State to the Commonwealth. The Constitution recognized an existing right, and such right was to be measured as at the time of the officer's transfer to the Commonwealth. At the time of the officer's transfer to the Commonwealth the Victorian Parliament ceased to have any power over the matter and the Commonwealth had no power to interfere as its powers were fixed by the Constitution. [Counsel referred to Bond v. The Common- wealth 1, Le Leu v. The Commonwealth (2), Lucy v. The Common- wealth 3 and Bradshaw v. The Commonwealth (4).]

Wilbur Ham K.C. (with him Fullagar), for the defendant. The question should be answered in favour of the defendant: sec. 84 of the Constitution does not militate against this view. The Commonwealth has power to alter pension rights but not contrary to the provisions of the Constitution. There are two contending views at least:

1whatever the rights of the officer were at the time of the transfer, they are crystallized, and even if they were conditional they could not be altered; 2 the rights which are preserved to the officer on his transfer are the rights which he would have if he had not been transferred. The latter is the correct interpretation. If the plaintiff had continued as an officer of the State, he would have retired under a State Act, and that position was always under the control of the Victorian Parliament and subject to alteration by it. The Victorian Legislature can alter the amount of the pension. Then sec. 84 of the Constitution takes up the Victorian Act as the measure of the officer's rights, and the Constitution itself says that the pension 2(1921) 29 C.L.R. 305, at p. 315. 252-254. 4) (1925) 36 C.L.R. 585, at pp. 592, 597. 3(1923) 33 C.L.R. 229, at pp. 250, 47 CLR 278

that the officer is entitled to is what he would have received if he

had remained in the Victorian Public Service. His rights to a pension are to be considered as if there had been no transfer at all and as though he had remained in the Victorian State Service all the time (Bond v. The Commonwealth 1; Cousins v. The Common- wealth 2 ).

The following judgments were delivered :-

GAVAN DUFFY C.J. In this case we are all of opinion that the plaintiff ought to succeed on the demurrer.

Sec. 84 of the Constitution fixes the amount of the pension as that which the retiring officer would have enjoyed if up to the time of his retirement he had still remained in the service of the State. That, at all events, is the latest time at which the criterion of the amount of the State pension can apply.

The demurrer will be allowed with costs, and there will be judg- ment for the plaintiff as sought in the action.

DIXON J. I should like to add that, although sec. 84 of the Constitution presents a number of difficulties, in my opinion it gives to the transferred officer a constitutional right which cannot be affected by legislation of the Commonwealth or of the State. When the section says he "shall be entitled to retire from office at the time, and on the pension or retiring allowance, which would be permitted by the law of the State if his service with the Common- wealth were a continuation of his service with the State," it converts into a constitutional right a right which previously had rested upon the authority only of a statute of the State Parliament.

Demurrer allowed. Judgment in the action for Solicitors for the plaintiff, Tolhurst &Druce. Solicitor for the defendant, W. H. Sharwood, Crown Solicitor for the Commonwealth.

1(1903) I C.L.R., at pp. 23, 24. 2(1906) 3 C.L.R. 529, at p. 535.